Cable is grilled
on fuel prices and hotel VAT

Business Minister Vince Cable , speaks to the Federation of Small Businesses annual conference, at the Spa. Picture by Andrew Higgins 121263d 23/03/12

Published:18:28Friday 23 March 2012

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CALLS to address the soaring prices of fuel dominated a question and answer session with Business Secretary Vince Cable.

Dr Cable addressed yesterday’s conference of more than 700 business men and woman before the floor was opened to delegates for questions.

The first to be asked echoed the sentiments of the Federation’s chairman John Walker, querying whether calls from businesses to cut fuel duty are being taken seriously by the government.

Dr Cable said the government is thinking about fuel ‘the whole time’, and is releasing emergency stocks of fuel into the system to try and lower prices.

Claiming it is an international problem he said: “On fuel generally we have got an oil price shock taking place that’s pushing up prices.

“There was a clamour in the budget for more kinds of action regarding fuel but we thought the party should do more to give low, middle incomes help.

“Its a matter of money, the problem at the moment is balancing the budget.”

Speaking to the Evening News after the session Dr Cable commented on calls from the hospitality industry to cut VAT on hotels and restaurants from 20 per cent to 5 in light of this year’s Olympic and Diamond Jubilee.

Scarborough hoteliers had backed a campaign by the British Hospitality Association to bring VAT rates in line with the rest of Europe, where five and seven per cent are charged in France and Germany.

Dr Cable said the calls had been heard but there was not room in the budget to take action.

He said: “Part of the problem is there is a lot of pressure to cut VAT for particular sectors. Given the state of the problems financially the Government is not in a position to make massive, very expensive tax cuts. I’m not saying it will never happen but the Chancellor didn’t mention it in his budget, it’s not something coming in immediately.

“The government realises seaside towns, like Scarborough and Blackpool, have very particular problems, and one of the roles of the Regional Growth Fund is to try and help those towns.”

In his address to the conference Dr Cable said he realised one of the biggest problems facing small businesses is access to finance, and that moves need to be made to “bypass banks” when getting money into business.

He said: “Essentially the problem is that still, three years after the banks crashing, there is still enormous problems accessing finance.

“An awful lot of people have been discouraged from applying because they know it’s difficult.

“One of the big lessons we have learnt is we have to look at this in a more fundamental way. What is needed in banking is more competition, and more banks coming in and focussing on business.”

Dr Cable said there are already examples of this, referring to Handelsbanken, which has a branch on the Scarborough Business Park.

He said: Another idea which would help would be to bring together all these government schemes which you probably find confusing into one institution that is more proactive in getting support for businesses wanting finance.’

Dr Cable also referred to measures taken by Government to cut the red tape businesses face. He said revisions of employment law is high on the agenda along with cutting and improving the enforcement of regulations.